The Importance of Using Blockchain Technology for the Development of Agricultural Product Insurance

This study explores the integration of blockchain technology into agricultural insurance, aiming to address several challenges within the industry, including low farmer knowledge, high administrative costs, and a lack of trust among farmers in insurance institutions. Blockchain technology is positioned as a means to enhance transparency, efficiency, and trustworthiness, offering a decentralized solution that records transactions in an immutable manner, thereby redesigning insurance products to better meet farmer needs. The methodology of the study involved consulting 15 experts to assess potential indicators of blockchain’s role in agricultural insurance during the year 2024. Using an Artificial Neural Network (ANN), the synaptic weight of various blockchain features was calculated, highlighting their significance. The findings revealed that the most critical features included "Reducing Ethical Risks," "Accelerating Damage Claims," and "Transaction Transparency," with corresponding synaptic weights underscoring their importance in the development of agricultural insurance. Despite the promising potential of blockchain to revolutionize agricultural insurance processes, several challenges remain, such as scalability, energy use optimization, and regulatory concerns. The research emphasizes the importance of understanding how blockchain can create a safe, transparent, and efficient platform for processing agricultural insurance claims and suggests that smart contracts could facilitate immediate compensation for farmers’ losses. To fully realize the benefits of blockchain in agricultural insurance, ongoing research and development are necessary, particularly in enhancing interoperability and educating stakeholders about the technology's advantages. Overall, this research demonstrates blockchain’s significant potential in addressing agricultural insurance challenges while also calling for strategic actions to overcome existing barriers.